Ease inflationary pressures
Problem: Testing procedures required by the US Food and Drug Administration raise the cost and price of drugs. Should we eliminate such requirements in order to ease inflationary pressures? How about the regulation of hot dog content?
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Question 1. Between 1929 and 1933, GDP measured in current prices fell from $96 billion to $48 billion. Over the same period, the relevant price index fell from 100 to 75. a. What was the percentage decline in nominal GDP from 1929 to 1933?
Testing procedures required by the US Food and Drug Administration raise the cost and price of drugs. Should we eliminate such requirements in order to ease inflationary pressures? How about the regulation of hot dog content?
What variables other than price appear to have the biggest impact on the demand for McDonald's products? How much influence does the company have over these variables?
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Use the given data for a perfectly competitive firm and the profit-maximizing input-combination rule to identify how many workers the firm will employ to maximize profits.
Use the interactive feature of the Bureau of Economic Analysis Web site, www.bea.gov, to access the National Income and Product Account Tables. Select Interactive Data Tables, which is listed under Publications.
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